The Experts Were Wrong About the Best Places for Better and Cheaper Health Care

A post in the New York Times’ Upshot column today focuses on a study that overturns the conventional wisdom that regions with low Medicare spending per capita have low overall healthcare spending. The study found that places that spend less on Medicare do not necessarily spend less on health care over all.

Based on findings of regional variation in Medicare spending, the Affordable Care Act encourages mergers among hospitals. The resulting larger, integrated hospital systems can often spend less money in Medicare, by avoiding duplicative treatments. But such systems also reduce local competition, and thus can set higher prices in private markets.

The regional variation in prices insurance companies pay for medical care are a major determinant of whether regional costs are higher or lower for private insurance.

The post also shows relative Medicare and private insurance spending in your location. Atul Gawande also covered this study in the New Yorker.